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Bond Market News

Allianz Reports €1.9bn in Provisions for Fund Fiasco

Allianz has set aside €1.9bn in provisions during Q1 2022 regarding its Structured Alpha Funds. The insurer said that the amount set aside was a fair estimate of its remaining financial exposure with regard to ‘compensation payments to investors’ and ‘payments under any resolution of the governmental proceedings’. It added that the provision will negatively impact its net income by €1.6bn, lowering profits to €600mn. Allianz’s Structured Alpha Funds saw a collapse of a $15bn set of investment funds during the pandemic in early 2020. Despite the provisioning and hit to its earnings, Allianz said that its dividend per share (calculated as the higher of a 50% payout ratio or a 5% increase from the preceding year’s dividend) was unchanged.

Allianz’s dollar bond’s were slightly lower with its 3.5% Perp down 0.2 points to 88.34, yielding 7.41%.

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